**Exhibit 10.4**

 

**$8,000,000.00**

 

**AMENDMENT NO. 1**

 

**TO**

 

**LOAN AND SECURITY AGREEMENT**

 

originally dated as of August 31, 2000 

 

by and among 

 

**HEALTHMONT, INC., a Tennesseecorporation**

**HEALTHMONT OF GEORGIA, INC., a Tennessee corporation**

**(dba Memorial Hospital of Adel, Memorial Convalescent Center**

**and MemorialHome Health)**

**HEALTHMONT OF TEXAS, INC., a Tennessee corporation**

**HEALTHMONT OF TEXAS I, LLC, a Tennessee limited liability company**

**(dba DollyVinsant Memorial Hospital)**

**HEALTHMONT OF OREGON I, INC., a Tennessee corporation**

**HEALTHMONT OF OREGON II, INC., a Tennessee corporation**

**HEALTHMONT OF OREGON III, INC., a Tennessee corporation**

**(dba Woodland Park Medical Plaza)**

**HEALTHMONT OF OREGON V, LLC, a Tennessee limited liability company**

**(dba Woodland Park Hospital)**

**HEALTHMONT OF OREGON IV, LLC, a Tennesseelimited liability company**

**dba Eastmoreland Hospital**

(“Borrower”) 

 

and

 

**HELLER HEALTHCARE FINANCE, INC.**

 

(“Lender”) 

 

Amended as of December 31, 2000 

 

**AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT**

 

**THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT** (the“Amendment”) is made as of January 1, 2000, by end between **HEALTHMONT, INC.,** a Tennessee corporation, **HEALTHMONT OF GEORGIA, INC.,** a Tennessee corporation dba Memorial Hospital of Adel, Memorial Convalescent Center andMemorial Home Health, **HEALTHMONT OF TEXAS, INC.,** a Tennessee corporation, **HEALTHMONT OF TEXAS I, LLC,** a Tennessee limited liability company dba Dolly Vinsant Memorial Hospital **HEALTHMONT OF OREGON I, INC.,** a Tennesseecorporation, **HEALTHMONT OF OREGON II, INC.,** a Tennessee corporation, **HEALTHMONT OF OREGON III, INC.,** a Tennessee corporation dba Woodland Park Medical Plaza, **HEALTHMONT OF OREGON V, LLC,** a Tennessee limited liability company dbaWoodland Park Hospital, **HEALTHMONT OF OREGON IV, LLC,** a Tennessee limited liability company dba Eastmoreland Hospital (collectively, “Original Borrower”), **HEALTHMONT OF MISSOURI, INC.,** a Tennessee corporation dbaCallaway County Community Hospital (the “New Borrower”) and **HELLER HEALTHCARE FINANCE, INC.,** a Delaware corporation (“Lender”). 

 

**RECITALS**

 

A. Pursuant to that certain Loan and Security Agreement dated August 31, 2000 by and between Original Borrower and Lender (the “LoanAgreement”), the parties have established certain financing arrangements that allow Original Borrower to borrow funds from Lender in accordance with the terms and conditions set forth in the Loan Agreement. 

 

B. Original Borrower now wishes to add New Borrower as a Borrower under theLoan Agreement. 

 

**NOW, THEREFORE,** in consideration of thepremises set forth above, the terms and conditions contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. Lender and Borrower have agreed to the following amendments tothe Loan Agreement. Capitalized terms used but not defined in this Amendment shall have the meanings that are set forth in the Loan Agreement. 

 

1. Addition of New Borrower. Original Borrower and Lender agree that the New Borrower shall from and hereafter be a Borrower for all purposes of the LoanAgreement and other documents. Accordingly, the New Borrower hereby agrees to be bound, by all of the conditions, covenants, representations, warranties, and other agreements set forth in the Loan Agreement, and hereby agrees to promptly execute allfurther documentation required by Lender to be executed by the New Borrower, consistent with the terms of the Loan Agreement. 

 

2 

2. Amendment to Loan Agreement. 

 

A. Section 1.32a of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

 

**“Section 1.32a Mortgage Documents.**“Mortgage Documents” means and includes all documents evidencing (i) that certain first mortgage loan in the amount of $5,000,000 made as of the Closing Date from Lender to Original Borrower (the “**Mortgage Loan**”)including, without limitation, the mortgage note (the “**Secured Term Note**”), the mortgage loan agreement (the “**Mortgage Loan Agreement**”), those several Mortgage, Security Agreement and Assignment ofLeases, and each and every other document now or hereafter delivered in connection with such mortgage documents, as any of them may be amended, modified, or supplemented from time to time, and (ii) that certain first mortgage loan in the amount of$1,900,000 made as of December 31, 2000 from Lender to New Borrower (the “**NB Mortgage Loan**”) including, without limitation, the New Borrower mortgage note (the “**NB Mortgage Not**e”), the New Borrowermortgage loan agreement (the “**NB Mortgage Loan Agreement**”), the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement, and each and every other document now or hereafter delivered inconnection with such mortgage documents, as any of them may be amended, modified, or supplemented from time to time.” 

 

B. Section 3.1(i) of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof: 

 

“**Section 3.1. Generally.** As security for the payment ofall liabilities of Borrower to Lender, including without limitation: (i) indebtedness evidenced under the Note, Secured Term Note and NB Mortgage Note, repayment of Revolving Credit Loans, repayment of the Mortgage Loan, repayment of the NB MortgageLoan advances and other extensions of credit, sale and purchase obligations under the Warrant; all fees and charges owing by Borrower, (including without limitation the Termination Fee) and all other liabilities and obligations of every kind ornature whatsoever of Borrower to Lender, whether now existing or hereafter incurred, joint or several, matured or unmatured, direct or indirect, primary or secondary, related or unrelated, due or to become due, including but not limited to anyextensions, modifications, substitutions, increases and renewals thereof,” 

 

C. The following new Section 6.23 is hereby added to Article VI of the Loan Agreement: 

 

“**6.23. Callaway County Community Hospital Property Condition Report.** On or before January 31 2001, New Borrower shall provideLender with a completed Property Condition or Engineering Report (the “Report”) for the Callaway County Community Hospital property. In the event that such report indicates repairs estimated at greater than $5,000 in 

 

3 

the aggregate, then the Borrowing Base will be reduced by an amount equal to the aggregate estimated cost of repairs. As such repairs are completed by NewBorrower, the amounts allocated to such repair(s) in the Report will be added back to the Borrowing Base.” 

 

D. The following new Section 8.1(u) is hereby added to Article VIII of the Loan Agreement: 

 

“(u) New Borrower shall have failed to provide Lender with a Property Condition or Engineering Report for the CallawayCounty Community Hospital property by January 31, 2001.” 

 

3.Confirmation of Representations and Warranties. To the extent applicable to New Borrower, New Borrower hereby confirms that all of the representations and warranties set forth in Article IV of the Loan Agreement are true and correct withrespect to the New Borrower, and specifically represents and warrants to Lender that it has good and marketable title to all of its respective Collateral, free and clear of any lien or security interest in favor of any other person or entity.

 

4. Grant by New Borrower of Security Interest. Consistent withthe intent of the parties, the undersigned New Borrower hereby grants to Lender a continuing first priority lien on and security interest in, upon, and to the Collateral, pursuant to and in accordance with the terms of Article III of the LoanAgreement. 

 

5. Enforceability. This Amendment constitutes the legal,valid and binding obligation of New Borrower, and is enforceable against such New Borrower in accordance with its terms. 

 

6. Costs. Borrower shall be responsible for the payment of all costs of Lender incurred in connection with the preparation of this Amendment, including allreasonable fees of Lender’s in-house counsel. 

 

7. Reference to theEffect on the Loan Agreement. 

 

(a) Uponthe effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement asamended by this Amendment. 

 

(b) Except asspecifically amended above, the Loan Agreement, and all other Loan Documents, shall remain in full force and effect, and are hereby ratified and confirmed. 

 

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in this Amendment, operate as awaiver of any right, power or remedy of Lender, nor constitute a waiver of any provision of the Loan Agreement, or any other documents, instruments and agreements executed or delivered in connection with the Loan Agreement. 

 

4 

8. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State ofMaryland. 

 

9. Headings. Section headings in this Amendment are includedfor convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 

 

10. Counterparts. This Amendment may be executed in counterparts, and both counterparts taken together shall be deemed to constitute one and the same instrument. 

 

**IN WITNESS WHEREOF,** the parties have caused this Amendment to beexecuted as of the date first written above. 

 
**LENDER:**
**HELLER HEALTHCARE FINANCE, INC.**

a Delaware corporation
By:    
Name:
  
Title:
  
 
**BORROWER:**  **HEALTHMONT, INC.**  
a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **CEO**  
 
**HEALTHMONT OF GEORGIA, INC.**  
a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)  
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 
**HEALTHMONT OF TEXAS, INC.**  
a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)  
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 

5 

**HEALTHMONT OF TEXAS I, LLC**

a Tennessee limited liability company
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **Chief Manager**  
 

**HEALTHMONT OF OREGON I, INC.**

a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 

 

**HEALTHMONT OF OREGON II, INC.**

a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 

**HEALTHMONT OF OREGON III, INC.**

a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 

**HEALTHMONT OF OREGON IV, LLC**

a Tennessee limited liability company
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **Chief Manager**  
 

6 

**HEALTHMONT OF OREGON V, LLC**

a Tennessee limited liability company
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **Chief Manager**  
 

**HEALTHMONT OF MISSOURI, INC.**

a Tennessee corporation
  By: /s/    TIMOTHY S. HILL         (Seal)    
Name:
 **Timothy S. Hill**  
Its:
 **President**  
 

7